2016 02 – News From Italy

Listening to Italy

by Orecchiette

WHAT CRISIS?

On 26 April 2001 the Economist caused a stir and triggered litigation when it featured Silvio Berlusconi on its cover above the question: “Why Silvio Berlusconi is unfit to lead Italy”. Berlusconi lost the court case and costs were awarded against him. Bill Emmott, editor at that time, has since gone on to highlight what he considers the endemic political and financial crises in Italy. Silvio Berlusconi features because he is the most obvious and colourful player. Emmott has made films and written books such as: Good Italy, Bad Italy – why Italy must conquer its demons to face the future (2012). He has also set up The Wake Up Foundation as his attempt to warn Italy in particular and other western countries in general about the challenges to liberal democracy. Predictably the web has a spoof  Economist cover with the heading “Is Bill Emmott fit to criticise Italy?”

Meanwhile criticism of Italy continues. Currently Prime Minister Matteo Renzi is under attack from the Euro hierarchy for the country’s position on migration and banking, both of which amount to huge and linked crises. On 19 January 2016 Huffington Post ran a piece from Alessandro De Angelis about a meeting between President Mattarella and emeritus President Napolitano. They discussed with great anxiety what they termed the current “perfect storm”. They wanted to ascertain whether Europe was actually attacking Italy the country, or the government of Renzi? De Angelis concluded by making reference to that Economist cover by concluding with, in English, “Is Renzi fit to lead”

On 21 January 2016 The Guardian published an article by Renzi himself. He used it to promote his record and attack the EU. Obviously the piece: “Europe isn’t working for this generation”, was written to counter criticism, but Renzi’s stance is positive, valuing only his vision. Interestingly he made no direct reference to being under attack from any quarter.  Renzi claimed that his 22 months in office have “simplified Italy” and he headlined his government’s legislative changes. The Pd, or Partito Democratico is on the left, but the changes are not left or even centre-left as might be expected. His“transformations” to the labour market in general and also to school teachers’ contracts have weakened the employee’s position in law while strengthening employers’ rights. They steamrollered a great deal of effective union opposition.

The revisions to the electoral law have still to be approved by a referendum in October. The electoral changes have removed the upper Senate, “the county will no longer require 315 senators”. The upper chamber did duplicate and complicate governance but it will be replaced by a cheaper, less influential, more advisory body. The flaw is that, bizarrely, in a country famous for nepotism, favouritism, influence etc, it is going to be populated with nominees from the regions.

The two issues central to Renzi and Italy’s current position relate to the migrant crisis and to the banks. Renzi’s article minimises the latter to “the recent turbulence around some Italian banks”. Italy has coped with cross-Mediterranean migration for a number of years. The EU and European countries have largely ignored the humane way that Italy has characteristically coped. The Dublin accord that requires the arrival country to process and be responsible for migrants is a contentious issue for Italy. Now that migrant numbers have reached what Cameron dehumanises as being a swarm, Europe has taken notice, although action is uncoordinated and entirely nationally self-interested.

Bill Emmott, late of the Economist, contributes occasional pieces for La Stampa. On 19 January he opined that Schengen should be suspended by all countries in order to save it, arguing that this will avert a collapse of the entire EU. Meanwhile Renzi is currently battling the EU over financial support for refugees. Italy would welcome more financial support and consideration for its efforts. However, the grant of 3 billion euro to Turkey to encourage it to contain the migrant crisis and reduce numbers crossing to Greece has upset Rome. The double insult for Italy is that it has been asked to fund part of this grant and sees no reason why it should contribute.

The second stick that the EU is currently using to beat Italy is over the Italian banking crisis. Four small banks, the two most significant being Banca Monte dei Paschi di Siena (which had been in trouble for some years) and Banca Etruria were bailed out in a way that is contrary to EU law. Renzi maintains that he acted in the most effective way but his indecision and dithering has counted against him. He also utterly rebuffs the torrent of criticism from Mario Dragi amongst others. The banks difficulties do also reveal corruption. In the context of  working to resolve the Italian banking crisis, the request to fund Turkey is in this and every other context something that Renzi can not countenance.

As this is Italy there is another interesting complication. Renzi’s Minister for Constitutional Reforms and Relations, Marie Elena Boschi was instrumental in constructing and implementing the constitutional reforms (that go to referendum in October) for the Government. She is a shareholder and her family has a large financial share in the bailed-out Banca Etruria, mentioned above. Beppe Grillo’s M5S (Movimento cinque stelle), always keen to act against any hint of complicity and corruption then brought a vote of no confidence against her. She easily survived it and continues. Although a look at the internet shows an undermining tabloid-type campaign to blacken her by suggesting that Renzi and Boschi share “hot smiles”. Boschi declared that attacks on her were attacks on the government. But a recent scandal over the M5S Mayor of Quadro in Naples and the Mafia has suggested that Grillo’s movement has quickstepped its way around an embarrassment in a manner that is both Italian and human.